Inexperienced Entrepreneur? Don’t Let These Costs Catch You Out!
As a new business, unfortunately, the odds are stacked against you – going into a venture with knowledge and experience can help you to even the playing field a little and avoid mistakes that can lead to your downfall.
However, with that being said, it’s not impossible to go into business without much of a background in it. Some of what are now the world’s largest companies were built from the ground up, in garden sheds, basements and bedrooms from people who simply had an incredible idea and a strong passion.
You do need to work smart – do your research, ask for help when you need it and be prepared to avoid errors that you can’t undo.
One thing that can catch out inexperienced entrepreneurs is just how much things can cost to be able to run- here are three of them. So be prepared!
It’s easy to think that as long as you’re selling a good product that people will come along and buy it. But it’s simply not the case, there are SO many businesses out there and regardless of how niche you are, there will always be competition for the same customers that you’re targeting.
You need to get your name out there, let people know you exist. They need to know who you are, what you do and why they should shop with you over your more established competitors.
For most businesses, different types of online marketing methods are the way to go. These include things like affiliate marketing, social media marketing and blogger outreach. If you’re a local business (such as a florist, launderette or cafe) and mainly sell to the people in the area you’re in, then more traditional methods too can be effective such as posters, flyers and billboards, leaflets through peoples doors, business cards given at events and more.
Do your research and work out what your marketing is going to cost. Unless you want to hire staff to deal with this or devote all of your time to do doing it yourself then outsourcing to a professional company is the way to go. But don’t overlook this, and the costs involved.
Taking on employees seems simple enough if you’ve never done it. You put an ad out online or in the paper, you choose the candidate who’s the best fit and that’s that- right? Of course, it’s never that simple.
First, you need pay to have your ad published, it needs to be seen by as many people as possible so you can attract the best candidates. Then it’s the time spent going through CVs, and the time spent interviewing. If you don’t get much interest then you’ll need to advertise again, and if you get a lot of candidates you might need to conduct second or even third interviews.
You then have the costs of running background checks, training, you might need to purchase more equipment for the employee to use or rent bigger premises if you’re taking on a number of staff members. Be sure to think it all through.
Finally, it’s common knowledge that you will need to pay 20% taxes, however, it’s still a cost that lots of inexperienced entrepreneurs can get themselves in a pickle with. In the early days of business you might not actually be turning a profit for a while and so won’t be able to put money away. When you do start making a profit this is being used to cover the losses you’ve made- but you will be taxed on these profits. Get used to putting away 20% of what you earn.
This is a collaborative post.